CONTRACTS-BREACH OF INDEPENDENT PROMISE AS GROUND FOR RECSCISSION

Having interested plaintiff in certain debentures, defendant, in return for a promise of one-fourth of any profit which plaintiff might receive, agreed to indemnify him against loss. By profit was meant any bonuses paid, and the difference between purchase and redemption price. When the call date was extended beyond the original period plaintiff gave notice that he would sell and hold defendant on his guaranty, to which defendant protested that no liability arose before the redemption date and that he would no longer consider himself bound. Plaintiff sold, but subsequently repurchased. The corporation having been wound up, plaintiff sued on the contract; defense, rescission. Held, no liability, defendant having acted upon plaintiff\u27s material breach of the implied condition of the contract that the debentures be retained until redemption. Guy-Pell v. Foster, [1930] 2 Ch. 169